http://www.lucasfox.com/Property/Spain/mallorca.html

1. So far in 2013 we
have already seen
more realistic pricing
from property sellers,
and we expect asking
prices to fall further in
the second half of the
year as sellers adjust
their prices in line with
buyers’ expectations.
Already, there is
growing competition
amongst investors
seeking Mallorca’s
most desirable
properties in prime
locations
MALLORCA
REAL ESTATE MARKET
Q1 & Q2 2013
Rafael Calparsoro
Director Lucas Fox Mallorca
www.lucasfox.comMALLORCA REAL ESTATE MARKET Q1 & Q2 2013
MALLORCA
REAL ESTATE MARKET: OVERVIEW
• Lucas Fox Mallorca has seen its best
period of trading since business began,
with more sales in Q1 and Q2 2013 than
in the whole of 2012
• The Mallorca property market is
predominantly driven by international
clients looking for a holiday home or
second residence
• Mallorca was the most popular tourist
destination in Spain in the first half of
2013, with notable increases in British
and Scandinavian tourists
• The new Residency Law which will
enable non EU investors to get residency
when they invest €500.000 or more in
property is already attracting a great deal
of interest from international buyers
MALLORCA
REAL ESTATE MARKET: SUMMARY
Mallorca property attracted growing
interest from international buyers in
the first half of 2013. This year has
seen the strongest international tourist
levels ever, particularly British and
Scandinavian visitors. Tourist numbers
from the United States, Russia, North
Europe and Australia are also growing.
This is translating into strong demand
for high quality, luxury holiday rentals
and a growing interest in acquiring a
second property on the island.
There are signs that sellers are gradually
starting to adjust sales prices in line with
buyer expectations. “More than ever,
we are seeing more realistic price setting
by property owners looking to sell”
comments Rafael Calparsoro, Director
of Lucas Fox Mallorca “The second half
of 2012 was a reality check for many
vendors, as prices started to drop to
the right level. This year, more vendors
are open to reducing asking prices
and buyers are better able to identify a
discount opportunity when they see one.”
“Villas close to the sea, properties on
golf courses, large country estates and
small country farms, apartments and
palaces in Palma Old Town remain the
most interesting to international buyers,”
adds Mr Calparsoro.

2. www.lucasfox.comMALLORCA REAL ESTATE MARKET Q1 & Q2 2013
Despite the more realistic pricing levels,
buyers are continuing to do their research
and want to be sure of the long-term value
of their purchase. “These properties are
being bought as a holiday home or second
residence so buyers are much keener on
getting the right fit for their own lifestyle. We
find many buyers return to view properties
on the island at least three times before
they are ready to make a decision and
buy,” Mr Calparsoro adds.
Ahead of the new residency laws
expected to come into effect by October
2013, there are indications of growing
interest from non-EU investors which
should have an impact on the Mallorca
property market in the last two quarters
of 2013.
“The biggest discounts we have seen are
in new build country houses and villas in
the 3 to 5 million range,” comments Mr
Calparsoro. “We expect greater interest
in these discounted properties in the
second half of 2013, as buyers become
increasingly aware that there will be
strong competition for these properties
when the new residency laws come into
effect.”
MALLORCA PROPERTY
TRANSACTIONS
The Balearic islands, which include
Mallorca, saw subdued trading in the
first half of 2013, after the usual end-of-
year peak in property trading. An annual
distortion of trends is evident in both
Spanish and Mallorca property trading
as properties change hands at the end of
the year to avoid the impacts of another
tax year. This translates into a jump in
property trading seen in December and
January statistical figures.
The Mallorca property trading year often
does not really start until the summer,
and this has been the case again in
2013. While there has been strong
interest amongst international buyers,
this has not translated into higher levels
of activity yet this year. In fact, across the
Balearic islands, overall sales of property
has fallen 13% lower than 2012 figures.
MALLORCA PROPERTY SALES PRICES
After a year when prices started to find
their level in 2012, 2013 has shown a
much more realistic pricing level being
agreed between buyers and sellers.
Property prices held steady and in some
areas lifted slightly, with prices in the
southern area around the Southern area
around Llucmajor falling most in price,
to €1,665 per square metre. Sellers in
Palma de Mallorca are finally showing
some signs of being more realistic
about asking prices, with sales averages
dropping only €24 per square metre
in the half year to €1,931 per square
metre. West Mallorca around Calvia held
steady, with prices reported at the end
of 2012, ending the half year on €2,460
per square metre. East Mallorca around
Manacor reported a price increase of €41
per square meter above end of 2012,
reaching €1,076 per square metre at the
midway point of 2013.
Amongst Lucas Fox luxury buyers,
the highest demand for properties in
Mallorca is for country estates and villas.
Investors are looking for plots of land
with large country houses or multiple
buildings on the one site. In Palma
de Mallorca’s Old Town, buyers are
continuing to seek out large apartments
(of more than 200 square metres) with
sea views.
Property Sales Transactions: Mallorca and Spain: 2012-2013
Source: ine.es
Mallorca Average Property Sales Prices Q3 2010 – Q2 2013
Source: Idealista.com

3. www.lucasfox.comMALLORCA REAL ESTATE MARKET Q1 & Q2 2013
€ per Square Meter
MALLORCA RENTAL MARKET
According to both Spanish web portals
Idealista and Fotocasa, Mallorca rents
shot up considerably in the second
quarter of 2013, leading into the summer
rental months with average increases of
€0.65 per square metre recorded in all
Mallorca districts. “As most rent averages
shot up only in the final month of the
second quarter, averages are expected
to climb in the third quarter of 2013”
comments Rafael Calparsoro
According to the Spanish Tourism Data
agency Frontur, in the first half of 2013,
26.1 million tourists visited Spain overall,
Mallorca Average Rental Sales Prices Q1 2011 – Q2 2013
Source: Fotocasa.es, Idealista.com
an increase of 4.2% over last year. The
Balearic Islands (including Mallorca) and
Catalunya were the principal destination
for the majority of tourists. British and
Nordic residents accounted for the
largest growing tourist populations over
2012 figures.
Short-term rental demand is indicated, in
part, by levels of airport arrivals to Palma
de Mallorca airport. By the end of the
second quarter of 2013, 9.28 million
passengers had arrived at Palma de
Mallorca airport, a drop of only 0.3% on
2012 figures and defying national trends,
where passenger arrivals were down 5%
as Spanish residents curtailed travel in
the wake of rising sales taxes. Mallorca’s
status as a major luxury destination
for international travellers protected
the island’s tourism sector and helped
contribute to the strong local economy.
FOREIGN INVESTMENT INTEREST
Lucas Fox website visitors looking for
properties in Mallorca grew 88% in the
half year to 30 June 2013, above the
second half of 2012. In addition, the
number of visits grew 127.39% in the
same period. This indicates that not only
did a larger number of people search
for Mallorca properties this year, but
many visited the site and researched
properties on multiple occasions,
showing a more serious interest in
buying and renting property than casual
site visitors.
International Visitors to Lucas Fox webpages for
Mallorca property 2013
Source: Google Analytics for Lucas Fox website
Mallorca Airport Arrivals (‘000s): 2011 - 2013
Source: Aena.es

4. ABOUT THE LUCAS FOX
MARKET REPORTS
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news on the Mallorca real estate market.
Alexander Vaughan
Founding Partner
Rafael Calparsoro
Director Lucas Fox Mallorca
For more information contact us:
E info@lucasfox.com / T (+34) 933 562 989
www.lucasfox.com
Foreign interest in Mallorca properties
grew fastest amongst UK, Russian and
French residents. Investors in North
Europe have also showed a much
stronger interest this year, with the
Netherlands, Brussels, and Italy more
than doubling the number of visitor
numbers to the website. Website visitors
from Brazil, Singapore and India – while
not in large enough numbers to be
listed in our top ten countries of website
visitors – were growing the fastest, all
with growth rates in visitor numbers
surpassing 300% increases.
LUCAS FOX ANALYSIS AND
PREDICTIONS FOR 2013
“So far in 2013 we have already seen
more realistic pricing from property
sellers, and we expect asking prices to
fall further in the second half of the year
as sellers adjust their prices in line with
buyers’ expectations. Already, there is
growing competition amongst investors
seeking Mallorca’s most desirable
properties in prime locations” comments
Rafael Calparsoro, “We predict a
fresh wave of buyer negotiations to
commence as North European residents
seek to claim properties in prime
locations ahead of increased global
competition when residency laws are
expected to come later this year”.
“The top quality amenities on the island,
including highly excellent golf courses,
marinas, top class gastronomy and
wine, and the island’s natural beauty are
putting Mallorca at the top of the list for
many international luxury property buyers
who want to combine lifestyle demands
with a sound long-term property
investment,” adds Mr Calparsoro.
“Mallorca is an important office for Lucas
Fox that adds to our recognition as the
number one independent estate agency
dealing with international clients in
Spain,” adds the company’s co-founder
Alexander Vaughan, “We operate the
office along the same lines as our head
office in Barcelona, and many of the
international clients who initially invest
in property on the Spanish mainland
end up extending their interest to the
Balearic Islands.”
“Autumn 2013 will see us launch our new
Lucas Fox Property Lounge in Palma de
Mallorca - a new concept in property
retail space that will enable us to offer
a more personalised service to our
clients,” adds Mr Vaughan. “We are also
working on new media related projects
that will ensure that we stay ahead of
our competitors, and continue to offer a
complete property service to both buyers
and property owners.”
The top quality
amenities on the
island which include
its beautiful marinas,
excellent gastronomy,
leading golf courses
and the island’s natural
beauty are putting
Mallorca at the top
of the list for many
international property
buyers who want to
combine a luxury
lifestyle with a sound
long-term property
investment.
Rafael Calparsoro
Director Lucas Fox Mallorca